In NJ, Creditors, wage garnishing can’t touch your stimulus check, here’s why

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TRENTON, NJ – Many people during the pandemic have fallen behind on payments, mortgages and others debts and are having their wages garnished to pay back their debts. When your COVID-19 stimulus check hits, if you live in New Jersey, it will be exempt from garnishing.

The following statement was issued by Governor Phil Murphy:

Today, Governor Phil Murphy announced that financial institutions across New Jersey have put in place measures to protect federal stimulus funds being provided to New Jerseyans during the COVID-19 pandemic.  


“The American Rescue Plan is for the American people, not the banks and creditors,” said Governor Murphy. “We want residents who have received their federal stimulus funds to be able to put it to use as they deem necessary. I am pleased that 50 banks and credit unions have signed on to our agreement to protect these federal payments being received by New Jerseyans from being garnished for past debts or overdrawn accounts.” 

“We know that many New Jersey residents are facing financial challenges as a result of the pandemic. This initiative is aimed at making sure New Jerseyans can access their stimulus funds and use them to cover essential expenses during this critical time,” said Department of Banking and Insurance Commissioner Marlene Caride. “We thank the banks and credit unions that have committed to providing stimulus payment protections to our residents and welcome additional institutions to join in this effort.” 

“Many New Jersey families have suffered economically and emotionally during the course of the coronavirus pandemic. Many of these same families will need federal stimulus money to help continue their daily lives, such as buying groceries, paying the light bill, or providing regular medical care for their children,” said Senator Nellie Pou. “These families should not be forced to use federal relief money to pay off a creditor, while they are still trying to recover financially from the pandemic, which may have caused a member of the household to lose their job. These new ‘relief’ checks are meant to provide a small measure of immediate relief, and that is how they should be used.” 

The Murphy Administration secured support from Bank of America, Citibank, PNC Bank, TD Bank and Wells Fargo, in addition to 45 other federal and state-chartered banks and credit unions to protect the stimulus payments of New Jersey residents. More financial institutions are expected to sign on in the coming
days.  The New Jersey Bankers Association and the CrossState Credit Union Association have endorsed this initiative and are encouraging all their members to adopt these policies. 

Affected New Jerseyans should confirm with their financial institution when the overdrawn status or negative account balance will be reinstated, including any applicable fees.

If consumers do not see their institution on the list, they should contact their institution to request information about any available stimulus protection programs offered in response to COVID-19. 

Additionally, Governor Murphy signed Executive Order No. 233, that provides all stimulus payments issued to New Jerseyans under the American Rescue Plan Act to be exempt from, and will not be subject to, garnishment by private creditors and debt collectors.  The Executive Order continues to allow for garnishment in connection with any action for, or any judgment awarding, any child support, spousal support, or family support, or any criminal restitution payable to victims.  

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